Prolific investor. Contrarian extraordinaire. Investment biker. Bestselling author Jim Rogers wears many hats, and is not tied down by labels or conventional wisdom, but the legendary investor has refused to bite the bullet when it comes to investing in startups which he considers a notoriously high-risk field.
Yet, even Rogers appears to be joining the bandwagon going by his track record over the last 12 months, during which he has invested in four startups. He defends his decision and says his startup investments were not about the capital, but that the entrepreneurs had approached him directly, which had got him interested and reiterated that he was not ‘changing his spots’.
“These founders were smart people and they reached out to me and asked would you invest with us, and I said yes,” he said in a recent interaction.
Three of his investments in this space are Korean firms, including Standard Graphene, the country’s first graphene manufacturer.
“Graphene according to scientists is going to be as important to the world as scientists. I did not say that, but scientists say it – it is thinner than paper and stronger than steel and they can even use to purify salt water. I have been bullish on graphene for a long time, and all of a sudden an entrepreneur in this space shows up – he has been in this business for a while, and therefore I put some small amount of money,” Rogers explained.
Rogers has also invested in two fintech startups – Korea’s Wealth & Liberty, which provides financial advisory services using a robot adviser, and Chinese online brokerage firm Tiger Brokers. The latter was also his first investment in a Chinese startup.
Rogers said he is ‘investing in the founders’ and not the companies. “I know nothing about fintech. But I found these were smart people and they contacted me directly,” he said.
Tiger Brokers, which allows Chinese investors to buy stocks from US and Hong Kong, recently disclosed its funding round worth $14.5 million (100 million yuan), the third for the company since it was founded three years ago. Rogers declined to state the amount he had put into the company, whose other investors include heavyweights such as Xiaomi Technology, China Growth Capital, and Citic Securities.
His logic behind Tiger Logic: “I know the Chinese are going to be huge forces worldwide in the financial markets for the rest of the century.”
His first startup investment was in 2016, when he put an undisclosed amount of capital into Illimus, a Korean cosmetics company.
“You know the Chinese cosmetics industry is unbelievably booming. Who knows where the cosmetics it will go – the Chinese are now saying they don’t want Korean stuff because they are in bed with the Americans,” Rogers pointed out, while emphasizing that his investment thesis was based on the fact that he found its founders were ‘smart and driven’, rather than the company’s prospects.
“If I lose all my startup investments, it is not the end of the world. The way I look at it – if these investments come to nothing, I won’t even notice. I don’t pay any attention to my startup investments,” he added.
But as an investor, by keeping away from startups, did he pass on the opportunity to make huge returns over the last decades?
“Many of the startups have become gigantic, or will become gigantic in the next 20 years. But thousands of startups have disappeared in the last 20 years. We remember Facebook because it was successful, but we don’t remember MySpace – it was a gigantic failure backed by unbelievably smart people with money including Murdoch.”
“We don’t know what is going to happen to Uber. You read the press about Uber recently and you say, ‘what is going to happen to them?’ Tesla is making all time highs, but I know guys who short Tesla, and who swear to me saying it will go bankrupt. I don’t know – I don’t have a position long or short in Tesla. Ask me again in 10 years, and even 10 years later, I don’t think I will have many more startup investments than I have now. Maybe, some really smart guy or woman comes and meets me, I may do something, but I am not changing my spots and my startup investments here were all coincidental,” the veteran US investor, who now lives in Singapore, added.